Corporate Transparency Act & Year-End Tax Planning: Key Insights for Entrepreneurial Lawyers


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In this episode, Ali Katz dives deep into two essential topics for entrepreneurial lawyers: the Corporate Transparency Act and proactive tax time planning.

Ali illustrates the importance of thinking ahead when it comes to taxes, a key differentiator between employees and business owners. Drawing on personal experience, Ali explains how proper tax planning in the final months of the year can save business owners from unexpected tax burdens. She also underscores the importance of complying with the Corporate Transparency Act to avoid hefty penalties, offering practical tips and resources for legal professionals to assist their clients with the necessary filings.

Key Takeaways:

  • Shift your tax planning mindset: As an entrepreneurial lawyer, start tax planning in October, November, and December to reduce your tax liability for the upcoming year.
  • Tax projections are crucial: By reconciling books and providing income and expense projections to your CPA, you can explore strategies to minimize your tax burden before year-end.
  • Plan for entity creation: Setting up business entities and adjusting cash flow strategies, like delaying income or accelerating expenses, are vital tools to optimize taxes.
  • Corporate Transparency Act compliance: Ensure your business entity files the beneficial ownership information with FinCEN, or face fines of up to $10,000.

Ali encourages entrepreneurial lawyers to adopt the mindset of a business owner by planning ahead and setting up structures that support long-term growth and legal compliance. By embracing these practices, lawyers can better serve their clients and build sustainable businesses.

 

Transcript


Ali Katz:
What you should be getting in really no later by then the end of November are tax projections. Tax projections are critically important for business owners. The first year I hit a million dollars in revenue in my business, 2006, I found out I had a hundred and I think $15,000 tax bill that I wasn't prepared for, unprepared, my CPA said, okay, well, your taxes are going to be about $115,000. I had not put away money for that tax bill. I was not prepared. I didn't do any tax planning before the end of the year, which if I could have, or if I had, I would have ended up cutting that tax bill in half. But by the time that she told me that I owed $115,000 in taxes, it was too late.

Ali Katz:
Welcome to the NewLaw podcast for entrepreneurial lawyers. Here at Personal Family Lawyer we want to help more families and business owners make eyes wide open legal and financial decisions. But we cannot do this without you. Which is why we started this podcast to find those of you ready to offer a better way to serve your clients. So, if you are a legal professional who wants to help improve the legal and financial wellbeing of your clients and offer a service model that differentiates you while meeting the needs of your community, and rest easy knowing that you are running your law practice like a real business, then join us on this journey by subscribing to the show and find out how you can use a new law business model to love your life as a lawyer.

Ali Katz:
Hello everyone. Today we are talking about two critically important topics for this time of the year for anyone in business, especially you as a lawyer. But if you happen to be listening to this and you aren't a lawyer, and you are in business, and you have a business entity, well, it's critically important for you as well. The two topics I am talking about today are the Corporate Transparency Act here in the United States and tax time planning. Now, you might be saying, wait a minute, it's October. Why are we talking about tax time planning? Or it's November, why are we talking about tax time planning? Taxes happen in April. But that's actually an employee mindset, not a business owner or entrepreneurial mindset. So listen in and I'll see you on the other side.